Following concerns about its price structure from companies like Spotify, Alphabet Inc’s Google (GOOGL.O) announced on Thursday that it is cutting the cost that subscription-based apps must pay Play Store to 15% from day one (SPOT.N).
Developers currently pay a 30 percent membership charge in the first year and a 15 percent fee after that. “Customer turnover, we’ve heard, makes it difficult for subscription firms to take advantage of the lower rate. As a result, we’re simplifying things so that they can, “In a blog post, Google stated.
The new structure will take effect in January of next year, and it is expected to encourage developers to move away from one-time payments and toward subscriptions.
Companies that sell e-books and on-demand music streaming services, which rely on the majority of their revenue to cover content costs, will now be eligible for a service fee as low as 10%.
Large corporations like Microsoft Corp (MSFT.O), Spotify Technology SA, as well as startups and smaller businesses, have criticized Google, claiming that the fees deprive customers of choice and drive up app pricing.
Google announced in March that it will halve the service fee it charges developers on its app store for the first $1 million in sales they generate in a year, a move similar to that of iPhone maker Apple Inc. (AAPL.O).
